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OUTSOURCING: Emerging Opportunity or Bear in the Woods? Bill Hogue Vice President for IT and CIO University of South Carolina

Repeat after me -- I embrace outsourcing!!

What is Outsourcing? According to the ECAR Research Bulletin, Issue 13 (June 25, 2002)…. …a long-term (greater than one year) contract between a customer and a vendor in which the customer delegates all, or a major portion, of an organizational operation or function to the vendor.

For the purposes of this discussion… …let’s expand the definition of outsourcing to include any measurable organizational activity that is contracted for any period of time to a third-party.

Why Consider Outsourcing? Utility – transfer one or more operational components, control costs. Enhancement – improve internal service delivery. Transformation – partner in a new area of service.

Benefits of Outsourcing (ECAR)  Access to superior technical solutions.  Share (or lower) risk.  Cost savings.  Better functionality.  Streamlined operations.  Staff reduction.

Outsourcing Challenges (ECAR)  Lack of internal cooperation.  Unfulfilled vendor commitments.  Projects off-schedule, over budget.  Unexpected technical problems.  Vendor unfamiliar with higher education.  Opposition from collective bargaining units.  Flawed process.

An Outsourcing Process for Higher Ed (ECAR)  Problem identification and evaluation.  Consensus building.  Planning and vendor selection.  Implementation.  Post-implementation assessment.

Remember to - Embrace! Expand!

The Situation at the University of South Carolina…

Written Briefing for a New President with a Mandate…  USC is open at all times to proposals, discussions, and serious consideration of outsourcing options for information technology services. Contact me.

Written Briefing for a New President with a Mandate…  USC expended over $1-million in FY on outsourced IT services, such as: –Infrastructure installation during building renovation and new construction. –Equipment installation, maintenance, and repair –Blackboard, security, content management, telephone, and voice mail services. –Video streaming for distance education and web content. –Satellite uplink services for distance education.

USC’s Outsourcing Criteria  Is the provider experienced, reliable, responsive, high-performing, and financially stable? Are their services sustainable over time?  Does the provider understand how to serve higher education customers effectively?  Does the provider offer advantages in cost, flexibility, access, efficiency, or technology enhancement?

USC’s Outsourcing Criteria  Does the provider offer a service – such as access to innovative technology or critical IT skills – that USC is unable or unwilling to provide?  Does a particular outsourcing proposal enhance – or erode – the core IT competencies required to improve the quality of instruction, research, and business operations and sustain critical services over time?

Presidential Briefing - continued  Listed outsourcing expenditures of $1-million are exclusive of annual expenditures for hardware, software, and electronic databases. These purchase orders often are placed with local or regional companies, or with national corporations who maintain local offices.

Presidential Briefing - continued  USC routinely uses contract and temporary employees for short-term projects or projects requiring specific expertise, or when funding is insufficient to support permanent positions.

Remember -  Consider “insourcing.”  Seek authoritative help – e.g., EDUCAUSE, Gartner, respected colleagues.  Expand the definition.  Embrace!! – and take control…